If you weren’t on Dawn Patrol this morning, you missed one of the more substantive presentations we’ve had on big-picture public policy in some time. Three experts from the non-partisan Concord Coalition with something like 50 years’ worth of budget and economic experience at the highest levels of the federal government rang the changes on the shape of the future.

As the (purportedly) ancient Chinese saying goes, “If we do not change course, we are in grave danger of ending up where we are heading” – and this sensibility was palpable in the room. Of course, there are some sales pitches that are harder to make than others. Concord’s Executive Director Bob Bixby noted, “Pain is a message that doesn’t necessarily work. I know, because I’ve been presenting that message for 20 years.”

But setting aside what’s politically palatable, if the long-term future of America’s economy concerns you, it’s worth it to download these three presentations.

Let me rephrase that – #190. That’s the KC metro area’s rank among the 200 metros scoped out by Brookings in Global Metro Monitor 2011, their latest survey of job and economic growth. For the record, we experienced year-over-year income growth of -0.6% and employment growth of -0.5% between 2010 and 2011.

Not that we were in undistinguished company by any means. Among other American metros in the lowest eighth were Las Vegas and Indianapolis; even West Coast powerhouse San Francisco languished with Kansas City near the bottom of the stack.

But beyond city-by-city results, the overall picture is nothing short of startling. Among the world’s 200 biggest metro economies, fully 90% of the fastest-growing metro areas were located outside North America and Western Europe.

Eight of the top 20, and eleven of the top 30 fastest-growing metros were in China. This should surprise no one, given the economic history of the past 20 years. But would you care to hazard a guess as to the nationality of the fourth-, sixth- and seventh-fastest growing metro economies?

You’re wrong.

They’re Turkish.

Now, where was I?

Oh, yes, the reasons why. For starters, there’s Mother Nature, and she was in one bad mood during 2011. Among the bottom 37 metro performers, seven were Japanese cities, and even those literally hundreds of miles from the worst of the March earthquake and tsunami took economic body blows, though spared the very worst as experienced by the nation’s northeast coast.

Political turbulence showed that human beings weren’t in a particularly upbeat mood in 2011, either. Cairo, Naples and Madrid were in the bottom 10%, with Athens dead last at income growth of -4.8% and job growth of -3.5%.

But Atlanta, the land of Coke, Delta and Home Depot, was free from both damaging seismic activity and large-scale rioting (the Occupy movement notwithstanding). How can we account for their position at #189, one step better than Kansas City? Des Moines (#172) has enjoyed not just low unemployment rates during the recession and the long march out, but the benefits of high commodity and farmland prices.

There are, perhaps two reasons immediately to hand to make sense of these kinds of results, and our own poor ranking. First, though there are plenty of bright entrepreneurial sparks in and around Kansas City, we’re not the town that first comes to mind when thinking of free-wheeling capitalism a la Hong Kong or New York.

I was talking with Harvey Siegelman some years back when he held the post of Iowa State Economist, and he wasn’t shy about what he felt was one of the biggest issues facing his state – dyed-in-the-wool conservatism. “Give an Iowan a million dollars and what will he do?”, he asked. “Why, he’ll turn around and put it into Treasury bonds.” I’d argue that we’re not quite as conservative as our northern neighbors, but there is something to his lament in terms of how many of us Midwesterners view the highest uses of capital.

The second reason, I think, is something more complex. There is still a long way to go. We’re not staring into the abyss as we were back in September and October of 2008. The economy continues to grow, and job markets are improving, though sluggishly. But the Great Recession’s psychological impact is not going to fade anytime soon. Caution is the watchword, whether it’s an employer waiting to see if a new hire makes sense for her company, or an employee surveying his career prospects and waiting to see if this is the time for a change.

Until both of these traits begin to change – the secular caution we learned from the crash of 2008 and the cultural caution many of us learned from our parents – we’re likely not going to be the kind of entrepreneurial city that we could be – or need to be.

On November 17th, we were lucky to have a visit from one of the best business speakers I’ve seen in a while. The Chamber marked the return of Insight Kansas City with a presentation by Harvard Business School professor Robert Kaplan here at Union Station. Kaplan was touring in support of his new book, What To Ask The Person In The Mirror and was wearing two hats – speaking on business leadership from his position in the HBS department of Organizational Behavior, and speaking on overall economic conditions, given his experience in accounting, finance and investment banking. Both parts of his presentation were outstanding and I’ll briefly summarize them in sequence.

The guts of the leadership portion of his presentation came down to something that doesn’t happen all that often – asking ourselves fundamental questions about what our business is for:

Have you developed and communicated a vision for your business?

How often do you articulate your strategy to your people?

If asked, would your employees be able to repeat it?

“To make money” Kaplan emphasized, is not a vision for a business. Heaven knows it’s a necessary part of operating one, but as a vision, it’s empty. You could argue that “to make money” was Bernie Madoff’s vision for his particular “business”. If a business owner doesn’t – or can’t – tell colleagues what their company’s vision is, and can’t get that clear, understandable vision into every employee’s vocabulary, then it’s time to step back, think, adjust and articulate just why they are doing what they do.

A second salient point of Kaplan’s leadership presentation was all about feedback:

Do you tell people things they do not want to hear?

Do you wait for annual performance reviews to do so?

Do you have 5 or 6 people who will tell you the truth (whether you like it or not)?

Kaplan administered a quick left hook to the idea of annual performance reviews as the place to address performance issues. If you deal with problems by . . . waiting eight months to deal with problems, why bother? Conversely, if you as an executive or employer are bluntly honest in how you deal with people in your organization, it only works if you’re prepared for blunt honesty pointed in your direction. The most soothing and comfortable place in the world is that place where you’re surrounded by people telling you what they think you want to hear. It’s also the most dangerous.

In the closing third of the presentation, Kaplan dug into an analysis of what he sees as an economy still capable of serving up substantial shocks in the years ahead. As consumers continue to pay off debts, governments also must deleverage. But this is a process that will take years. And unlike consumers, governments face the task of trying to maintain economic growth while paying off their own debts.

Above all, the amount of complex derivatives sloshing through the economy – in effect insurance on securities – remains enormous, perhaps as much as $60 trillion worldwide. The Fed does not closely regulate these securities, and as one-on-one agreements between individual corporations and financial firms they’re not traded openly on any exchange. Given this, and in light of the EU debt crisis, the potential for volatility remains strong, and business must be prepared for turbulence.

How can business prepare for such turbulence? It’s not just a case of adopting a more conservative mindset towards expenditures. It’s about getting back to the basics – articulating a clear vision, focusing on core strengths and aligning your company’s strengths with where you need to go in unsettled times. As Henry Kaiser said, “Challenges are just opportunities with their work clothes on” and unsettled times can be moments of outstanding opportunity – if you ask the right questions of the person in the mirror.

Chamber Chair Greg Graves pushed the ‘send’ button on an email seven months ago, and that’s what started the journey to the Big 5. He asked 17 friends to convene a “no bad ideas” meeting to talk about goals for the region. I still have that email, in which Greg writes, “Jim Heeter and I either like you, respect you, fear you, or think you’ll offer a unique perspective. I’ll let you guess on that one.”

We wound up convening two dozen meetings, with still more ideas gathered through The Chamber website, during radio appearances, via email and letters and just being buttonholed on the street.

It took seven months to get to the Big 5 – seven months of meetings and discussion with people from all over the KC region, all of them passionate about improving this place we all call home. Our first list of big ideas numbered 182. Here – in no particular order – are the final Big 5:

1. The World’s Symposium on Animal Health — Champion: Gary Forsee

The KC Animal Health Corridor, situated between Columbia, Missouri, and Manhattan, Kansas, already boasts the single largest concentration of animal health interests in the world. In fact, KC area companies account for nearly 32 percent of total sales in the $19 billion global animal health market. Holding a global symposium cements the image of the Corridor as THE center for animal health.

Spurring economic development, preventing violence, improving education in the urban core were ideas that came up at many of the Big 5 meetings. Dunn and Stewart are already meeting with key leadership, organizations and foundations, and hope to have a strategic plan within the next 90 to 120 days.

3. The Making of America’s Most Entrepreneurial City — Champion: Peter deSilva, UMB Bank

We’ve got the assets and the history, and, like the Urban Core initiative, entrepreneurship was another consistent idea in our meetings. As deSilva says, better to grow our own rather than try to woo fickle corporations to locate here. Business growth and job creation aren’t coming from the big guys these days; they’re coming from entrepreneurs and small businesses

The overarching goal here is to make KC a nationally-recognized center for translational research. The five year goal is to raise $60 million to triple the recent National Institutes of Health (NIH) Clinical and Translational Science Award (CTSA) granted to area researchers. “This could be transformative,” Dr. James says. “It’s a force for further economic collaboration… and an engine for economic growth that will touch all parts of our regional economy.”

5. The New UMKC Downtown Conservatory — Champion: Leo Morton, UMKC

This “Big Idea” calls for relocating the renowned UMKC Conservatory of Music and Dance to a new downtown location. Currently the Conservatory is housed on the UMKC campus in three different buildings that require extensive renovation. By moving the campus downtown, it leverages new and existing assets including the Kauffman Performing Arts Center and the Crossroads Arts District, and grows Downtown.

So, that’s the list. It was, I admit, hard to get to the final five. There were a lot of great ideas from which to choose. But we believe these five goals will create jobs and build a greater community for all of us.

It’s up to the Champions to come up with their plans for implementation. Incoming Chamber Chair Frank Ellis promises regular updates as to our progress on each. So stay tuned – and thanks to all of you who shared your ideas with us.

Well, another six months have come and gone, leaving the latest iteration of The Chamber’s Regional Business Survey bobbing in their wake. As always, the results make for interesting reading, assuming you’re someone willing to devote at least a small chunk of your free time to digging into the percentages.

Two trends stand out in the latest report. First is improvement in current business activity reported by survey participants. This growth hasn’t exactly been explosive over the grand total of five surveys since we kicked off the program back in the summer of 2009. It has, however, been quite encouraging. Two years ago, 40.3% of participating businesses characterized their business activity as “Strong” or “Very Strong.” In the most recent survey, over 57% chose one of these two categories, and these combined totals have increased survey over survey for two years now. Clearly, at least for some Kansas City companies, things are looking up.

At the same time, uncertainty hangs over the survey like fog over the Golden Gate Bridge. When asked whether economic growth in the region was heading in the right or wrong direction, a narrow plurality this time around chose Option Three – “Not Sure” – to the tune of 46.1%. The most popular choice among six alternatives for those asked to name the “Most Immediate Problem for Business” was “Unpredictability of Business Conditions.” And nowhere did business uncertainty show up more clearly than in hiring expectations. Just over 25% of those surveyed expect to have more employees in six months than they have now. This is a meaty drop from the 42% expecting more crowded assembly lines or cube farms just one year ago.

What can we make of this contradiction? That’s a tough call. Kansas City businesses haven’t exactly been standing still since things got weird back in 2008. 28.5% percent have indeed cut staff, and nearly 66% have cut spending. At the same time, 41% have expanded products or services, nearly 55% have increased their marketing efforts and nearly three-quarters have spent more time than ever building up relationships and beefing up their networking.

But with jitterbugging stock markets, political food fights filling the cable channels, and plenty of businesses in a tight fight with a short stick for that next customer, it may be that that inherent Midwestern conservatism for which we’re not too-unjustly famed is inspiring companies to wait and see just a little bit longer.

If you’d like to dig into the whole shebang, just click here and have at it!

So, what if a ratings agency pulled the fire alarm and the engine company never arrived? What if the only result was a tinkling of broken glass and a momentarily alarming chorus of honking klaxons? And what if the reaction of the world at large was a rush to purchase the very debt that agency had warned was no longer worthy of its highest standards?

Well, now we know. Following Standard & Poor’s downgrade announcement on August 5, the working week of August 8-12 saw the kind of high g-force Coney Island market action that comes along only once in a great while. However, that was the week that was. Ten days post-pronouncement, by the morning of August 15, the market stood slightly above where it was when the downgrade announcement came out.

Whatever the short-term reactions to Standard & Poor’s downgrade, the longer-term backlash is only now getting under way. For starters, who could imagine that Lawrence O’Donnell and Donald Trump would ever agree on anything? The downgrade made it possible, with O’Donnell referring to S&P as a “confederacy of dunces” and Trump calling the firm “losers” and “disgraceful.” A more civilized take on the decision came from Faith Consolo, chairman of the retail leasing and sales division at Prudential Douglas Elliman in New York: “To put it mildly, S&P’s track record hasn’t been the best in recent years, and most sophisticated investors know this.”

Beyond the immediate market shockwave, complications continue to radiate from S&P’s decision – or rather, radiate back to S&P. On August 17 the Wall Street Journal reported that the city of Los Angeles announced that it will no longer use S&P to rate its investment portfolio, citing the U.S. debt downgrade as “irresponsible and just excessive.” And the Securities and Exchange Commission is working on two fronts. One part of an ongoing investigation is concentrating on just what methodology S&P used to arrive at its conclusion that U.S. debt was now only AA+. A separate probe seeks to discover “whether certain market participants learned of the downgrade before its announcement.”

In the end, what it comes down to is this: after the stock market jello stops jiggling, and after all of the political puffing and blowing dies down, S&P has no credibility left when it comes to rating whether a company or a bond or a nation are a safe bet. Along with its compatriots in the ratings industry, S&P greased the skids for the housing bubble and subsequent financial collapse, handing out AAA ratings right and left for bundled high-risk mortgages as if they were just as credit-worthy as Treasury Bills.

In words that will live in financial infamy, two unnamed S&P executives spelled out exactly how things worked at their rating agency in an instant-message conversation on April 5, 2007. The topic of discussion was yet another “AAA” bundled-mortgage instrument.

Official #1: Btw (by the way) that deal is ridiculous.

Official #2: I know right…model def (definitely) does not capture half the risk.

Official #1: We should not be rating it.

Official #2: We rate every deal. It could be structured by cows and we would rate it.

So, here we are. We can worry about the credit ratings assigned by the Lords of Bovine Structured Finance and in doing so ignore their record of professional achievement over the last decade. We can stand horrified and immobilized by admittedly nasty short-term market conniptions. Or we can get on with what we do as a business community – digging up information, finding new customers, thinking of new ways to improve a service we provide or a product we create. Given the collective resilience, optimism, and inventiveness of the 300 million+ inhabitants of this amazing country, I know which of the three courses I’d choose.

Dreaming of what can be has been an enjoyable experience, but now comes the hard part.

As you know, we’re working to determine The Chamber’s “Big 5” goals for the region. We started by asking the question, “If you were CEO of ‘Big KC,’ what goals would you set?” We collected ideas from the Web and from about two dozen meetings with elected, civic, and business leaders across the region.

On July 12, we held an all-day session where many of those same people helped us pare the list to 20 Big Ideas. It was no easy task, but the discussions were both thoughtful and animated. (Here’s a link to a video from the seven-hour session and a small photo gallery of the day.)

Now we’re preparing for August 29, when The Chamber Board will make the final decision. Chamber Chair Greg Graves has assigned me the task leading a task force to handle the next phase of the process.

The group will include the 24 community leaders who convened our original “No Bad Ideas” sessions. The easy part, I think, will be selecting the “Big 5” ideas we’ll recommend to the Board. More difficult but critical will be quantifying what success looks like.

We also need to find a “Big Champion” for each of the ideas. For some of the ideas, it may be appropriate for The Chamber to take the lead, but there are some initiatives on the list that are already underway. In those cases, our role will be to bring to bear the not-insubstantial resources of the regional business community.

First of all, thanks to those of you who sent us their Big Ideas for Big KC. Talk about creativity and passion – the ideas we got through this website covered a range of issues and opportunities. You’ll find those suggestions among the 182 Big Ideas we’ve collected, posted here.

This all started when we began asking the question, “If you were CEO of “Big KC” – the region – what would your goals be?” Chamber Chair Greg Graves and I met with civic leaders and CEOs, minority representatives and mayors, and proponents for arts, transit and trails, and urban KC. More ideas came via the Web and call-in talk shows.

I have to admit – it’s been great fun.

Greg and I have also seen a real desire at all the meetings for true regional collaboration and determined action. People want to find ways to work above the state line.

The ideas we’ve collected are fascinating. Here’s just a sample:

Create and pass an initiative petition to triple Missouri’s existing cigarette tax (now the lowest in the nation at 17 cents a pack; the national average is $1.45 per pack) and use new money for a variety of good purposes. (The current 17 cents/pack raises approximately $63 million annually).

Convene a year-long process to study the feasibility, costs, and interest in building a light rail system and make a final decision one way or the other.

Here’s our next step: On Tuesday, July 12, The Chamber will hold an all-day session to bring the list to a more manageable number. The process will be led by Michael Gallis, an internationally-known expert in large-scale metropolitan regional development strategies. (Michael’s clients include cities and regions such as Detroit, Charlotte, Orlando, Cincinnati, and Memphis.)

At the end of the day, we’ll have a shorter list to take to The Chamber Board for final consideration. We have no idea what will be on the list – the ideas may be as originally presented or a new amalgam of several proposals.

Next Tuesday promises to be a thought-provoking and interesting day. We’ll keep you posted.

As Boomers move toward retirement (three years ago I would have written “retire”, but that was then), change moves with them. Now, with early 2010 Census numbers in, Brookings has taken a look at what those numbers are beginning to show.

Between 2000 and 2010, the number of Americans 45 years of age and older grew 18 times faster than the number of Americans under 45.

The numbers of seniors – those 65 and older – rose most rapidly in Sun Belt states, but the number of “pre-seniors” (aged 55-64) is rising rapidly in all regions. Ironically, this growth is particularly strong in hip young university towns like Austin, Madison & Raleigh.

“Aging in place” (remember this phrase, it’s going to be important) – the number of older Americans not moving south for sun and surf is substantial. Certain regions – northeastern states, the upper Midwest – are also seeing relative growth in the numbers of seniors and pre-seniors as younger residents up stakes and leave.

The repercussions of this shift are going to be complex and will be fully understood only in retrospect. But possible outcomes include:

Increasing financial strain in northeastern and inter-mountain western states – with more seniors aging in place, and relatively fewer younger workers to support social service systems, even enhanced voluntary and government measures may not be enough to meet an aging public’s needs.

Increasing division by age along geographic lines – every single one of the top ten primary cities showing strongest population growth under 45 from 2000 to 2010 is a Sunbelt city. All but two of the primary cities showing the biggest loss of residents under 45 for the same period were Rust Belt locations; of the two exceptions, one was New Orleans.

Increasing potential political division along geographic lines – states and cities top-heavy with retired or soon-to-retire residents are likely to end up voting very differently than younger areas when topics like Social Security, spending and Medicare get tossed into the blender of electoral politics.

Call me crazy, but I think I may have uncovered some sort of theme in regional health care news over the past week:

On June 13, North Kansas City Hospital unveiled a $16 million expansion plan for its emergency medicine department. Its emergency facilities would nearly double from 18,000 to 31,000 square feet and would expand emergency capacity from 65,000 to 80,000 patients annually.

On June 14th, the University of Kansas Medical Center announced that it had been awarded a $20 million grant from the National Institutes of Health. It will fund efforts to translate therapies from promising laboratory processes to treatment methods over the next five years. KU was one of only five medical centers nationwide to receive the NIH Clinical and Translational Science Award in 2011.

On June 15, Truman Medical Center announced that Grandma’s Alzheimer Fund had donated $120,000 to its Foundation; annual distributions from the grant will go to support Truman’s Lakewood Hospital’s Alzheimer Unit

On June 16, the University of Kansas received an anonymous $4 million gift to fund spinal cord injury research. The money will pay for the efforts of two groups of researchers at the Medical Center’s Institute for Neurological Disorders.

Strategic thinking, world-class medical and competitive skill, outstanding generosity, whether public or very private – all combined for a memorable week in regional health care. May there be many more such weeks as summer wears on!